News of the Fed’s commitment to buy $300 billion in longer-term Treasuries is weakening the dollar, increasing fears of inflation. To quote Phil in members’ chat: "NOW the dollar is dropping hard! 5% down, that’s all of your stock gains wiped out in real money." – Ilene
Fed to Buy $300 Billion of Longer-Term Treasuries, By Craig Torres, Bloomberg:
The Federal Reserve said it will buy $300 billion in Treasury securities and acquire more mortgage and agency debt in an effort to bolster housing and hasten the end of the recession.
“To provide greater support to mortgage lending and housing markets, the committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage- backed securities,” the Federal Open Market Committee said after a unanimous vote in Washington today. “Moreover, to help improve conditions in private credit markets, the committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.”
The Dollar Is Getting Wacked On Fed News
Courtesy of Braunie at The Market Guardian
WASHINGTON (MarketWatch) — The Federal Reserve surprised financial markets and committed to buy $300 billion in longer-term Treasuries to help the economy recover. The Fed was more pessimistic about the outlook, in a statement released after its two-day meeting. Officials removed language saying they expected the economy to recover later this year. The Fed tweaked its other credit-easing programs by committing to buy more mortgage-backed securities and agency debt and include more asset-backed securities under a new credit facility starting this week. The Fed repeated that deflation was a risk to the economy. The vote on the statement was unanimous.
GOLD is rocketing higher………INFLATION IS AHEAD
Dollar falling off a cliff
